✍️ FinZelo Editorial Team 📅 September 2026 ⏱️ 7 min read
📌 Key Takeaway: Self-employment tax covers the Social Security and Medicare contributions that an employer would normally split with you — since you're both employer and employee, you pay the full 15.3% yourself, though half is deductible.

Why Self-Employed Workers Pay More

A traditional employee pays 7.65% in FICA taxes while their employer matches the other 7.65%. As a self-employed worker, you're responsible for the full 15.3%, since there's no employer to split it with.

2026 Rate Breakdown

ComponentRateWage Base
Social Security12.4%$184,500
Medicare2.9%Uncapped

The Deduction for Half of SE Tax

You can deduct half of your self-employment tax as an adjustment to income, mirroring the way an employer's matching contribution isn't taxable to an employee — this reduces your income tax, though not the SE tax itself.

How It's Calculated

SE tax applies to net self-employment earnings (roughly 92.35% of your net profit, after a small adjustment), not your gross business revenue — deducting legitimate business expenses first lowers your SE tax along with your income tax.

This page is for educational purposes and isn't personalized financial or tax advice. Figures, rates, and program details change frequently — confirm current terms directly with lenders, tax professionals, or the IRS before acting.